Producer Surplus
6-6.1. Producer Surplus definition: Producer
surplus is defined as the difference
between what producers actually receive
when selling a product and the amount
they would be willing to accept for a unit
of the good. Firms' willingness to accept
payments can be read off of a market
supply curve for a product.
6-6.2. Producer Surplus uses: Producer
Surplus is used to measure the welfare of a
group of firms which sell a particular
product at a particular price.
6-6.3. Market supply curve: The market
supply curve shows the quantity of the
good that firms would supply at each and
every price that might exist. Read the
other way, the supply curve tells us the
minimum price that producers would be
willing to accept for any quantity
demanded by the market.
6-6.4. Derived of Producer Surplus curve :
A graphical representation of producer
surplus can be derived by considering the
following exercise. Suppose that only one
unit of a good is demanded in a market.
As shown in the adjoining Figure, some
firm would be willing to accept the price
P1 if only one unit is produced. If two
units of the good were demanded in the
market then the minimum price to induce
two units be supplied is P2. A slightly
higher price would induce another firm to
supply an additional unit of the good.
Questions:
1. Give the definition of the
production?
2. list factors of the production?
3. Draw the stages of the production?
4. Give
the
Producer
Surplus
definition?
5. What The market supply curve
shows?
6. Translate the fallowing paragraph:Mass production
Mass production (also called flow
production) is the production of
large amounts of standardized
products on production lines.
It was popularized by Henry Ford
in the early 20th Century,
particularly in his Ford Model T
Mass production typically uses
moving paths to move partially
complete products to workers, who
perform simple repetitive tasks to
permit very high rates of
production per worker, allowing
the high-volume manufacture of
inexpensive finished goods. Mass
production is capital concentrated ,
as it uses a high proportion of
machinery in relation to workers.
With fewer labour costs and a
faster rate of production, capital is
increased while expenditure is
decreased.